Healthcare costs are continuing to rise faster than GDP in the US and Canada with the cost of new therapies a major component of that growth.

Insights

An easy and effective way of reducing health costs is to decrease the number of people who receive therapy.  Payers often accomplish this by limiting access to drugs by creating barriers to treatment in the form of co-payments and restrictive reimbursement criteria.

 

This is short sighted policy. 

 

It’s short sighted for patients.  Those who don’t have the means to overcome the cost-burden don’t have the opportunity to achieve the same level of health outcomes as those that do, either because they can’t get the treatment at all or because they don’t take the medication as frequently as indicated.  In the latter case, payers are incurring the cost of the therapy and getting limited to no health economic benefit.

 

It’s short sighted for drug makers.  Excluding appropriate patients from treatment limits the ability to recapture the investment in R&D to develop the drug and undermines R&D for new therapies.

 

In response, pharmaceutical companies have introduced hundreds of patient support programs designed to ease the financial burden of taking their therapies.  These programs work, and as today’s edition of The New England Journal of Medicine illustrates in their article Drug Companies’ Patient-Assistance Programs — Helping Patients or Profits?” the industry now spends $$ billions on them annually.

 

As Dr. Howard illustrates in his article, these co-pay components of patient assistance programs undermine the efforts of payers’ attempts to limit access through increased patient financial burden.  This has prompted warnings from the US Department of Health and Human Services (DHHS) that such programs could be regarded as ‘kickbacks’.  Various payers and the DHHS have tried to discourage use of patient assistance programs, though with limited success.

 

Healthcare costs are continuing to rise faster than GDP in the US and Canada with the cost of new therapies a major component of that growth.  We should expect healthcare authorities in the US and Canada to continue to try and contain these costs by limiting access and this will likely include taking fresh aim at patient support programs.  As said earlier, this is an easy way to contain costs.

 

An even more effective way to contain costs would be to expand the use and efficacy of preventative health management so fewer people get the condition that require these therapies in the first place.  Of course, that’s not easy.

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